The Philippines’ Shared Services Growth Led by Captive SSCs
The Philippines is host to one quarter of all shared services centres across the ASEAN region. Given its cultural affinity to North America the country has long been a favorite for voice-based support service. However, over recent years the government has invested significantly in supporting a broader array of business services. As a result, according to SSON Analytics' latest Philippines research, we have witnessed a more than six-fold growth of shared services centers (SSCs) and BPOs since 2000. And while BPOs were the primary growth driver up until 2010 (they still account for nearly 2/3 of all in-country operations), since then shared services have taken the lead in expansion.
What's interesting to note is that a third of current SSCs have US headquarters, and service predominantly global markets. In fact, taken over all, one third of the combined shared services and BPO operations in the Philippines provide service support on a global level, compared to 17% servicing only America, and 25% servicing the APAC region.
While banking, financial services and insurance (BFSI) is the industry most commonly represented, and nearly a third of captive shared services work is finance based, IT support is the most popular service for BPOs. In line with global trends we are also seeing analytics and marketing as growth services.
Captives centers seem to be grasping the value-add opportunity of the Philippines marketplace ahead of BPOs, possibly the result of their more recent growth. So while nearly 80% of SSCs are focused on higher value-add processes, for the BPO segment this is only just over 50%.
The ultimate driver of growth is, of course talent, and while the National Capital Region – the most popular location by far, housing 80% of all centers in the country – also offers the most graduates per year [more than 125,000], there is significant talent distributed across the country, including in regions that are currently not yet tapped out. And while attrition has long been associated with local centers, the data tells us that as many SSCs suffer from high attrition as from low attrition. The report also identifies some of the more popular and successful strategies shared services are employing to attract and retain talent.
If you are considering the Philippines as a location for your global service delivery strategy, this latest free visual report from SSON Analytics will help guide your decision. Also find out why BPOs are moving to the provinces (chart below)